Daktronics revenue down 6% in third quarter of fiscal 2017

Digital sign manufacturer Daktronics reported a net loss of $2 million on revenue of $116 million for the third quarter of fiscal 2017 (3 months ended January 28, 2017).  The third quarter is historically Daktronics’ weakest due to seasonality in the sports business, construction cycles and a decrease in production days due to holidays.  Here are the highlights from the earnings release and the Seeking Alpha earnings call transcript.

  • Revenue declined 6% to $116 million in the third quarter of fiscal 2017.
  • Orders increased 23% during the third quarter of fiscal 2017.   The company’s Commercial Business, which includes digital billboards, had a 9% increase in orders for the third quarter of fiscal 2017 and a 20% increase in orders year to date.  The increase in orders is good for the company’s future because orders become revenues when signs are shipped.
  • The company had a net loss of $5 million for the third quarter of fiscal 2017 compared to a net loss of $2 million for the third quarter of fiscal 2016 due to reduced revenue and increased selling, g&a and product design expenses.  The third quarter is typically the company’s weakest due to seasonality and a decrease in production days due to holidays.
  • CEO Reece Kurtenbach said the outlook is positive for the company’s billboard business: “In our Commercial business unit, our Spectacular segment has many opportunities in our pipeline that position us for an increase year-over-year…Our Billboard segment, we expect similar to slightly improve volumes based on overall activity…demand for replacement and new digital billboard requirements.”
  • Kurtenbach also projected increased product development expenses for the company: “…we are increasing the velocity in product development.  While these efforts will increase development expenses, we believe it’s necessary to drive forward exceptional solutions to capture global market share and deliver value to our customers.”
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